Gain an Edge and Increase Profits Reading Price Action | Price Is King!Jun 17, 2021
so good morning everyone, thank you for being here, I really appreciate it, you know it's always very humbling for me when I turn on my computer and find people showing up to hear what I have to say on a Saturday night tomorrow, so I really appreciate it, so let's take a look at this. Today's class is more or less my request, and as I said, it will be relatively informal in the way that we're going to go over some of the basics of charting and
action. and then go through some methods to practice
actionwork and the things I used to spend literally hour after hour doing because it would make someone frustrated with themselves for how I missed that trade with you I know we always look back and you get frustrated .
How did I miss it? What would I do? Because I'd be mad at myself, but I'd try to find a way to let you know that it's productive. You go back and study the price action leading up to it and I would go back and forth one period at a time one day at a time and look for the different changes in price action so I could study that because I was committed to the fact that I didn't she was going to lose the next time she saw him. I wasn't going to punish myself for missing this time, but I didn't want to lose it a
gain, so I would really focus on the price action, and that's nice. of what we are going to do today there are no slides we are just going to jump right into the chart and i chose this chart for a reason when you look at charts one of the things that people tend to do is tend to focus too much on the absolute right
edgeok we focus on the absolute right
edgeand we don't actually take a look at the graph that you see if I zoom in this graph looks very different than when we come back here what's your first impression when you look at this choppy graph yeah , it's a price action nightmare ok the there's no consistency the price is not deliberate it's a disaster it's ok when i see a chart like this i don't care what's going on here i'm not interested in this chart because the chart normally it doesn't change its character you know that if we've been through several years of disorder like this, it usually doesn't change its character in one move, does that make sense guys?
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So one of the first mistakes that I think people make in charts is to always think that every chart is an opportunity. to trade and i dont think its true when i see a chart like this i just want to avoid it like the plague i want to avoid it like the corona virus i mean it you know you get close to this and some more of that mess rubs off on you you cant wash it actually makes your account sick trying to trade something like that it's a mess so yeah that's right this wouldn't be on my watch list even if I initially spotted a price pattern here it wouldn't go on my watch list for this so one of the things I really want to impress everyone is how important it is to look at the chart, not just look at the right edge, but look at the chart, what's going on here and it's okay, you can even look at a weekly, what's going on? here and when we look at these charts to take a look at the big picture and see what's really going on is something you know when you look at this chart does anyone feel like yeah I can figure out what's the next move here? yeah and yeah it would be like otherwise it's a mess so when we find charts like that when we find good charts it's also a good idea to just go back you know if we take a look at a square if you guys remember we swap a lot of SQ back here actually if i turn on all my drawings you can see all the drawings here on this chart when we were training this it's okay when you look at a chart like this and you see a price pattern like this these are the charts that go on your list these are the t charts you can make a lot of money on and they are easy to trade so for me part of building a qualified watch list is really loo
kingat the charms not just the hard right edge remember the most important thing for me in any exchange is what I want. to see a chart that has a trend and if i can't see the price action and consistency and trend can you find?
I mean, is there anywhere in the market where you can find a trend that is more beautiful than that man when he was doing this? its price action was deliberate it was consistent it was beautiful this is a chart you're just giving up everything you want on that chart you're giving up a potential trade it's okay because we've got that beautiful trend we've got that beautiful consistency we've got price action that's easy to hold and watch and you know a question that comes up a lot is how many charts should i have in a watch list let me ask you the question in a different way when i find a chart like this how many charts are you ally need to be trading right you have a few like this and it's in good shape right you don't need a ton of charts ok you don't have to have hundreds and hundreds and hundreds of charts that you see as a fact I would tell you what most people do on a daily basis is lose chasing chart signals, rushing through the day and not focusing on price action, how many of you would admit that this has been a problem for you?
You in the past or may still be because I know it was for me I would I would spend my days running chasing scans chasing you know whatever it is he's chasing and you guys would probably also admit that you would see a trade and say mmm boy yeah I like that and then I jump to the next dozen and by the time I come back or if I forget, after all, I should come back and find that the action worked great and didn't change it at all because I wasn't focused enough to slow down and set up a trade that you know watching that video this morning that kind of thing you think about you know how that person was filming and doing this in those in the woods and things that were slowing down you notice how he would stop and actually take a look at something and film something that we should to do with our charts we need to slow down we need to stop chasing so much and focus on some charts some good trends ias ok now i would go back and say wow how did i miss this? train how what happened here why didn't i go into this and you guys did this the other day on a chart and i'm going to go through a chart like this and an exercise where you just take TC mm you can go down here at the bottom ya which you can see it's a little hard to see on a white chart, but it's there and I would pull back a chart, okay, and start analyzing price action, you all know that. there are two basic patterns i trade well the first the first pa The first requirement is that the stock must be in a trend we can't trend until we make a higher low either the PPO what we call a pullback opportunity from PPO that's Rick's Rick gave that name to that pullback opportunity or I search that comes out of the box okay what you can see on my channel is the pattern I changed oh forever okay and essentially those are the two patterns I change. my job my full time job is to look for these two patterns within a trend ok now if the downtrend on the chart is here do I really have an uptrend to trade?
That is now for me now you can make money believe me you can make money here i prefer to wait for the trend to show yes yes this is a wedge pattern I wait for the trend to show. I want to see the downtrends break. here for a second but i'm going to go to the dow right or di amonds right now and we're going to pull this pull this back do we have a trend that we don't have right? We don't have a reason to be chasing a bunch of stock trades. downtrend, we don't have that uptrend established yet, but let's be honest guys, what was everyone doing in the last few days?
Everyone was trying to find long trains so when we see graphs like this and this is a daily. I have to consciously remember even though the Bulls were trying to hold this market and trying to hold it and do things that every time we've gotten here to this area we've failed and I can tell you I'm not smart enough to begin to know when it will break this downtrend until it's ok you need to refresh or refresh the room you can't see the picture please refresh the room assuming you are on a computer and not your phone. it's on your phone and you won't get a picture unless you log in t through a browser ok that's something i want to impress everyone i don't have any desire anymore masoli time i would fight this all the time and try to be the one superhero trader that could predict or pick funds from the market and I can tell you that I never had a good win ratio trying to do that in fact what it did to me is it kept me so beat up in my training it kept me so frustrated in my training that I wasn't really enjoying training well because I was always fighting it's like you know going into the ring with Muhammad Ali and thin
kingyou're going to get out without getting hit and bleeding yeah it's a very expensive hobby and just because the market is open doesn't mean that I have to be in it right until I get the settings I want.
I don't have to be in it right and I think that's a very important thing for all operators to develop. ollen ok now we can take a look at the intraday charts and we can certainly find patterns and intraday during this crazy market t that are potentially tradable ok we can find those positions and patterns but intel and to make those quick entry trades and exit and with the current volatility are some of the best things to do right now because of how wild the market is but when we take a look at those daily charts and I'm really trying to focus on that daily swing trading right now time for this class because that's where i spend most of my time looking for those daily swings but i need a trend to do that and what i see on this chart and i think y'all have to admit under this trend currently and the fact that we failed at this price support here the other day where we broke down that this has every reason to believe that this could go down and actually be a c trade orta, right?
If we're honest with ourselves that's what that graph looks like so I'm going to go back to that square since we were at it mm-hmm I'm going to pull this back and we're going to explode this to this area that I was looking at so when I look at this chart and see that we actually bottomed here we rallied we had an ugly ugly sell off here this was a
gainevent I don't really see the start of the trend on this chart until we break down here we have to go up through the move down we have to rise up and show that the institutions are really supporting and backing this stock and that's how the stock trends the institutions have to support it now a Once we identify that there is some type of trend on a chart, we now need to start thinking about our price patterns, what are the patterns or is it us?
We are going to try to trade well and I am going to switch to a 3/8 trap. and I will take you back to that area. That's something you wish ec2000 would do if you pull back a chart all charts go back but that's not the way it works ok so when we start to see the 3:8 cheat pattern remember we're looking for two things which we know our t trend has started we broke our downtrend remember right here we broke that downtrend so our trend is starting to start in this area now be mindful with trap 3 to any trap 3 trade /8. true because I've been stuck in those one too many times where it got me instead of price or I could make money so for example this crossover used to change the chase all the time and too many times it got me here and then it would actually fail and make a new low and honestly it's about half the time you get a false breakout ok so we have to wait for stocks to pull back and hold remember our pattern is this we found the trend we wait for the pullback and then look for an entry if it holds support until this happens here we're going to remove this because the 3/8s that the trend indicator normally uses and that trend eater is clearly defined here or the downtrend became an uptrend ok so looking at these charts and looking at these patterns now we have to start defining our setups and inputs and I get this he asks all the time okay what is a buy signal and we have these periods we have these questions in these times we are fighting ourselves we are always fighting ourselves we are always fighting our natural defense mechanism to protect ourselves right when i put a graph like this and i say there is a 3/8 trap setting the first thing to happen happens to me every time evenwhen i send a transaction i get emails why are you buying that? the reason I get those questions is because people don't have a plan they're not planning ok I'm telling you exactly why I would choose a trade like that because it finally broke the downtrend it finally rallied and pulled back and held support and i have a 3/8 trap set up with possible injury ok now when i have a resistor above that and by the way could you guys call this a lesser resistor?
I will trust and respect the trend in the operation. I will take opportunities like that. If this operation is established with a sufficiently low risk. I'll take those trades. Does that mean this is a perfect setup? No, and that's the thing that everyone wants to try and identify the perfect train the perfect setup and I can tell you in Mike the whole history of trading there has never been such a thing there has never been a perfect setup because we always have to find our own natural inclination towards you know for protection we question ourselves right we challenge ourselves now the only way you can fix that problem is to have a plan ok if you know your risk tolerance how many dollars you are willing to risk at a stop it should be really easy when you look at a train like this it should be a pretty simple decision does this glitch meet my risk tolerance?
Do you see what a lot of people are trying to do? They are trying to find a guarantee. Let me fix that problem for you and tell you that there is never a guarantee in the market there is no guarantee that there will be a win on whatever train it takes the only thing we can control is how much risk we take and the patterns we choose to train make sense that is the only thing things that we can really control and we have to get over this idea that there is the perfect trade that there will always be, you know, that perfect action that will give us a winning trade that I have never found. which to be true in fact I have never found that you can trade just one stock at a time and make money okay now think about this for the logic here for a second guys if we look at that diamond chart if diamonds are they break their downtrend and hold as support a d start to see buyers come in if there's going to be more than one trending stock at that point it's got to be much more correct the only way those indices can do that is if many stocks are trending a lot of stocks are starting to go up if the indices show us a trend if we go out looking for the perfect trade today and just try to make one trade and then sit and watch it all day what is going to happen to us ? miss many others this trade could be the one that faked us out so while there are a lot of stocks going up we move on to the trade that flopped or went nowhere and where that doesn't add even more frustration so One of the Things that I want to encourage everyone to do is when trends start to occur, we have to get over this idea that we can take a trade and then just watch it all day, okay?
What happens when you look at a chart as it moves well first it gets really really boring and so what you try to do is try to get fancy ok let's get fancy here and let's go to a 5 minute chart and Let's see if we can handle this now on the five minute chart because at least there's something moving there, the emotion starts to build right, Scott sang, the anxiety emotion starts to build, and before you know it, you've made one of the critical mistakes in training, you micromanaged yourself into a loss or you micromanaged yourself into a small winner who could have been a big big winner. we just leave it alone ok let's think about this concept for a second when a stock starts trending is there anything you and I can do about it?
There is nothing we can do about it, what is the best course of action for us? set a trend find our trend set our trading plan our entry make sure it's acceptable and then do whatever relying on our technical analysis we can't force it and even if we look at it all day it won't make any difference to the stock. Remember that the market doesn't care if you make money. He doesn't care if he loses money. should hold support is that at the new trend or horizontal support line we break out of the trend first we broke the downtrend here so the weirder trend starts or the uptrend starts the only place the trend can start uptrend is the first support hold when buyers come in and pick up and start to push up that's where the trend starts that's what i described right here right stocks go up pull back that's where the trend starts say a curse there ain't trending now that means you have to buy this first entry No you don't have to buy that first injury you could have bought right there you could have bought right here okay so just because that's the first and the most perfect potential entry doesn't it means that's where you're going to come in, often times the trend has moved before, sometimes I even put it on my list, ok, what matters It's just that we've started the trend, okay, once it's established, draw your line, where's the trend?
Are we responding to the trend? green all the time that's our trend no it doesn't matter as long as you stay within that trend it doesn't matter well would it matter if you bought this candle or this candle or this candle it doesn't really matter that much as it fits your risk tolerance it works it it's consolidating that's what it's doing it's resting and consolidating it's still running well still a winning trade you oh I will I'll set up yes I find tons of trades Lauren pretty much every day I find tons of trades Those are potential setups I don't trade because I don't They meet my risk tolerance for the trade.
There is something out of control. The volatility is too crazy. Something along the lines. I'm working for a high win-loss ratio, which means I don't just trade to trade, okay, I don't trade, I just keep busy, okay. less than a lot of people are ok and i'm ok with that i don't need to trade every day i don't have my i don't have you know my ego in the market saying yes everyday is a day to trade everyday is a day i'll just be taking chances and they know I don't want to be that guy in the first place, it's stressful, okay, and even though they know I work long hours, I'm lazy, I don't.
I don't want to work so hard, okay, so you have to think about it well and gracefully. That's true. Some people trade for income but still have to follow a guideline. They still have to follow the rules if they're risking it all and they're there they're not being aware of the trends and that kind of stuff embellishes their attempt to trade for income it makes them go broke they can argue with the market like so much Do what you want, the market will always win. We are not big enough to beat the market. Okay, that's right. the right institutions have all the advantages over us have their computers connected directly to the backbone of the market they can watch our train train against our trade and get back out before our trade really fills the high frequency load trading algorithms that are run against the market, okay? we know about two thirds of the market volume now is in dark pools we can't even see where they move anymore okay but you know if we give up on the idea that we can predict where institutions are going or going or all that kind of stuff and just wait for them to show us all we have to do is follow that's all we have to do is follow where the institutions show us they want to go it was very hard to make money square here w like really simple , it really wasn't a hard thing to do to make money in sq and there are tons of stocks like that that we've seen and talked about and trained that just continue or have continued to do their thing ok so let's talk about a couple of patterns here that I won't trade ok I'm pretty strict about the crossover of three and eight ok if I have a three that breaks below the eight now the reason why it breaks below the eight eight is let's think about the technical pattern here what happened to create that move and we forgot about that when we put indicators on the chart our eyes go to the indicators when we stop looking at price action what happened here well what created that situation is we broke price support we broke through price support, so what does that tell us that we broke price support?
I see all three crossing below the eight this is no longer a tradeable move I'm interested in because I know we could easily pick up hit resistance anywhere here and ruff that's not the trade I'm looking for again I don't have to doing so i train every move in stocks and have proven i can make really good money supporting my family putting the kids through college being extremely picky about trend and trades ok ascot if you are trading just a straight naked chart dont use anything like Um, yeah, you're going to have to make decisions like that, but what I'm trying to do is talk about the 3/8 trap because a lot of people here are following the 3/8 trap trade, okay? so i'm pretty strict with that setup now the other thing is if i turn off the trend indicator here for a second and they turn on the volatility stop we'll see another situation that sets up nicely where the stock truck the volatility stop is giving us showing telling us we broke this support ri Okay right now one of the things Scott is going to have to work on is if he's going to trade just a straight naked chart and that's perfectly acceptable okay 99% of all my trades come from a direct chart. rising naked chart but if you're going to train that straight naked chart right here you have to recognize that this broke price support and it's not a trade anymore, does it respect resistance and trend support or not and if it doesn't, it will cost you so you have to make those decisions by trading that bare chart we have to remember hey price support broke ok that will be important that will be important so make sure you pay attention to this the stuff you're focusing on the technical aspects of the charc makes sense guys you have to focus on the technical aspects if you can't pick and choose and say well this is one I'm going to follow this is one I'm not going to follow a stock moves up consolidates moves up and then that support breaks this is now out of trend ok this is now out of trend ok so as we go down this chart and by the way So guys this is something we talked about the other day as we went through this chart I would move these charts forward a day at a time okay as I was reviewing price action prices that have already moved and , seriously guys, I would go through marathon sessions, my wife would get really mad at me because I worked long hours during the week.
You know, building houses, I'd leave it at 5:00 in the morning and not come back until eight-nine at night sometimes and then I'd look at the charts and then I usually work quite a bit on Saturdays and I'd get home Saturday afternoon and I'd spend all night sometimes just looking at charts and practicing price action and i did it for hours and hours and hours at a time i would pull a chart and study the price action ok now in ec2000 they make it very easy go back the chart and d the parentheses keys will take you forward one day at a time ok and i would look at these chart patterns ok what happened here this turn we had a gap up so what happens when we make a gap and walk away, yeah do i still have those dreams? sometimes Steve, where I'm actually inside the chart, I'm standing, I'm always standing right in an area like this and I'm looking at the chart, I'm looking at the shape of the prices and when and it's funny when that when the markets fall, the candles are actually falling on me yeah I'm weird ok I'm a nerd when it comes to charts but what happens when a stock gaps like this and we have to consider the whole thing? the things that happen on a chart correctly all the things that can happen right this was probably an earnings event or a news event of some kind that created that gap on the chart when we get that excessive movement like this a lot of times what it creates is a longer consolidation just think about that for a second you know we got it that big flash move well we'll get the longer consolidation okay everything has to go back to normal everything has to settle we've all seen those graphics and we all get excited about those graphics where we canget a stock gapped up give a little pullback then just run to the moon those are rare they happen but they are rare and i'll tell you the truth i'm not interested in them unless i catch that trade before it really blows up and moves i'm not interested and you know when i'm in a trade and i reach the gap, i'm more likely to close the trade than anything else, take the profit and say thank you very much mr. the market is good so the amplitude of price moves matters when we get those excessive moves up on a chart we have to know the chances of a pullback or consolidation like that is just the natural move for the stock to come back to some kind of trend to now clearly establish what we're going through here think about this for a second this trend here basically broke because of the consolidation of this trend here when we came up it pushed us very far on the chart so where is the trend where is the trend the trend has changed right when we have a gap move like that we have to wait for the next entry signal to start identifying the next trend because trends change we go from trends like this to trends like this we've
increased or we have trends like this suddenly flatten out so we have to wait for the next t endence and as you move this here and look at this advisory we're just getting that longer consolidation okay now you know my pattern out of the box pattern of out the box requires a minimum of four days and strict consolidation do we have a pop? out of the box pattern set up here yes clearly correct so my next step on this chart is to set a price alert.
I'm going to wait for that train to come to me. I really don't care if it goes up or if it fails. goes back down and Phil's ass cap I don't really care but if it goes up I know I have a pattern here because I notice the gap is holding support and I don't care how long it takes. I really don't care if this takes three weeks. or a month and a half or two months I don't care and the reason is because I put an alert and I forgot I let the graph do what it has to do and it comes to me I'm not here I'll go back and look at it 19 times throughout the year day trying to figure out that you know how to micromanage input.
I'm going to wait for the train so that the shares continue to move sideways. to move right now someday i want to because they get this question all the time and i want to describe this pretty clearly if the market is bullish ok i get this question frequently so do you buy it there 99% of the time? If the market is bullish I buy it right there and the reason I do that is what I explained earlier in the first place. or there is no operation that is a guarantee, right? Do I have a setting here? this has to be a winner or loser.
I have no idea and will never know until I pick up the tray. I'm going to respect price action more than any indicator so where does my stop go? my stop will always go below the price action always. I'm always going to respect price action if I can't make this trade work based on how far away I mean I walk away from the trade if I look at this and say well that's too risky I can't take that trade, I walk away, but what I don't do is I don't pull this chart because I How many times have you seen a stock break out of a consolidation like that, the stock break through a consolidation like that? or two days and then it goes back and then says I could get my title input right here that fits my tolerance if I just pay attention to the chart I'm still trending that's another major mistake people make is we're constantly chasing the new flavor of the day true we are not giving the market the proper respect it needs just wait for the trade most of the time Laura yes you will get a pretty substantial pullback or longer consolidation when when we break up when we get that move from amplitude right there so what I do on a trade like this is set my stop and essentially I'm rolling the dice correctly I have my pattern I have my setup I have an alert I have a low risk entry and it meets my risk tolerance win lose or push, I'll take that trade, okay, because if I wait, if I try to micromanage this, what will happen if the stock goes up?
How many of you have ever seen an operation like this? this and you go man I wish I want to be on that train but I'm j solo so I'm not sure about this resistance here I can't take that trade even though it fits within my tolerance I'm arguing with the market here arguing with the trend I can't take that trade and then what happens the next day is the stock is up here and now I can't trade it quite right so once again I'm going back. Good transactions require you to plan transactions. Know your risk tolerance and decide if this is my pattern.
This is my setup and trust transactions. I don't know if it's going to win lose but we know we have a loss that we have calculated to be acceptable we don't want it to happen we also have a market that is trending we are trending with the market stocks are trending why are we arguing with a setup potential? Why are we trading with the market? and the reason that happens is because they don't have a plan and they don't stick to it. It really is that simple: they're trying to be the perfect trader and you'll never be one.
I just put it out there is that you won't be a perfect trader. I don't know if Rick is listening or Steve is listening or ed is listening. Do you guys ever consider yourself a trader? perfect there is no such thing so set your plan set your train and there it is so i take those trades more of the time if the markets are trending and i am comfortable with the direction of the market i take those trades i don't argue with the market or the stock pattern continues to go up, but it didn't really blow the doors off here, should it?
I changed something about this train because it just didn't work. I really want to earn some money, but I should change something here. No, there is nothing substantial about the pattern that has changed on the chart. look at the market Joe yeah or if there are a lot more trains potentially populating that I could even set up during a morning session or something yeah I will sometimes set auto orders if triggered via conditional orders that are triggered through a level to enter me i introduced in an exchange ok but generally nowadays i am here and i have time so i set the train after the alert goes off ok and here is the other thing if i have an alert here and i have already done the job. to know that I have a trade that fits my risk tolerance when that trade triggers, can you guys just jump in there and accept the trade and then come back and put my stop loss to make sure nothing really changed there but already Do I know the correct setting?
I'm ready for the train. I'm not chasing him, so I can be prepared ahead of time for that train. It makes sense, yes. We worked hard with Lex to make those things happen. well as i just said sorcerer when you trigger my entry if i like the pattern set in the market the direction is good the trend is good i accept the trade it doesn't have to close above there i accept the trade when the order is triggered or when the alert goes off most of the time ok try to micromanage or manipulate e that now you can be the type of person and its ok to do this you just have to remember if you wait for a close up there you may miss the train if you take off at next day and going well now on the other hand sometimes you can also miss the interchange where you showed up hit that input and back now here's a difference that I think is really very important guys when I catch a train remember I said I waited here .
I am noticing a pop out of the box pattern that appears out of the box requires a minimum of four days. Do I rush to perform an operation on a popup box? If I need a minimum of four days. I have to be pacient. Let the boss train. the pattern binds if i'm expecting that ok what's the other key factor here? and you guys hear me talk about this quite often, the actions go up, we get this zoom here stuck, zoom up and we get a pullback that seems nice. so we get that strong pullback and then right here we get that nice bullish c Andle ok what that usually means is that the trend is all the way back over the rings.
Wrong tool. I think I'm a second. I'll have to redraw that tool. I changed in me. so that buy signal shows up here but our volatility stop is down here because of the breadth of the move like this yeah the risk is too great and I can tell you a lot of times on that really strong really fast move I will pull back if I take this trade, the next candlestick is this and what it will do most of the time is because this was a nice strong move, it will consolidate on its way into the trend and then the actual buy signal occurs here. doesn't necessarily stop you or create a bad trade but sometimes you have to wait a week and a half for that to come back yes risk shows if you take that train your risk will always show volatility stalls things will be too far off price so if you have a lot If you're planning your train you're going to avoid those positions so that's a key item to think about so notice what we've done here on this chart is we just continue to consolidate and hit the tray . ok now is this the end of the world i should just drop this chart and start whining and whining and oh the market does this to me all the time it barely triggers me and no it just happens it's just the market doesn't drop the chart ok, what are we doing here?
We just start watching and waiting for the next potential entry, so we go back up. There is no input exchange here. Good. I follow your plan. No input exchange. No input exchange. Again, we have three days of an emerging pattern, do you think we could set an alert here and this is what just happened as we really did set our trend here so we are looking forward to this trade? now for days we got our set of patterns pop out of the box up no swap fail down or three no train alerts ok the other day i showed you one that showed you a trend that they were just perfect setups i wanted show you one that it's not perfect setups because this is more of the Common Good, can you see that patience from our training is what's really important here?
We are following our rules in our plan. We stay consistent with our training. So now we're crossing over again to continue consolidating this great expansion. in price here it created a big consolidation move and if I pull this back, we will essentially go back to our big overall trend, right? And if we look here, we still hold that price support, so there is nothing. wrong on this chart um no balance of power reversal with not necessarily a trend is more important to me than anything else trend support resistance and trend remember guys the indicators just not me the three in the eight and they just helped me find a train seventeen helps me find a train but they are not important price is important ok the only time i will really focus on bob there is a very specific time so i will focus on bob and can explain that one of these days or there's even classes on that actually but I can't explain that one of these days so now we're crossing our threes starting to stretch and we're starting to do this little movement so I'm not on this train .
I'm going to wait for the next entry to have a little bit of consolidation here and that was just the reaction to this high price here, but I can honestly tell you that I probably wouldn't have caught it, I probably wouldn't have been on that train. I am going to continue to see krummy price action here making it very very difficult to get into the trade pop another consolidation out of the box set three holding above eight we have broken through resistance place an alert price here, let's see if. we can get into a boating trade to form I'm probably on this trade when we show up there I'm probably on this trade okay son of a gun other but if you had set up your stop correctly under this price support you probably would have stayed in this tree, let's move on. goes up very hard ok we are up six days in a row if we are in this trade we should take profit we should scale out yeah take some money out of this trade expecting some type of stop or pullback here soon was our little 4 day breakout pattern continuing to go up and there we got the big buzz so even if I had a trailer hereyou should probably be out of that trade ok ok by the way i want to point this out right here notice that all three stayed up or right on the eight that wasn't a plan violation or a trade violation ok huh?
What do you think when looking at this graph? What do you think of this? move certainly some volatilities go into this trade but there's our uptrend and sinking candle right you think we should put a price alert up here you might not like the trade setup ok here's the thing and this is the question that you will have to ask yourself, this down here was a fairly low risk entry, this not so much. for some people this could be a good train this is not a good trade ok so recognize those moves and how steep they can get away so the longer you stay in a consolidation the better the amount of your feelings, but it's getting better here. you're in the trade you've made that decision above the eight oh you're staying in the trade now wow wow you got pretty rough price action right there right in this consolidation pretty rough price action , so for those who bought that train here and put that stop loss here they stayed in the position they were uncomfortable with the trade for a while, but they stayed in the position.
Those of you who pushed your stop too tight missed the support. We are detained. It doesn't mean they were wrong. or lemons and you need to try to make some lemonade out of them so as you practice this price action go back to these charts and try to pick those trade entries by doing this one day at a time you can see that as you go through from the market gave you lessons yeah that's right as you go along and you're looking at these price patterns that you can watch and see them play out the more practice you get doing this the better you'll be at setting up those alerts on those trains those tickets potentials in positions so we went up we broke resistance on the chart we should set up an alert here we are getting closer and closer to a3 a trap type trade still moving to the right trend I pull this chart back us We are still taking this move to show them we're in position or stopped out of position, okay yeah that was nasty wasn't it?
Here's the frustrating thing about this you guys noticed a pattern to this this is something else that when you do this you'll learn how many times we've seen good entry signals and then you completely reverse what's happening here and you'll see this from time to time in the graphics. market makers love this game yes yes market makers and algorithms those high frequency trading firms love this game this is where those institutions have an advantage over us and from time to time they will pick stocks like this one, where you'll get that beautiful entry cue and almost immediately get slammed. in another direction stops are removed and then stocks turn around and continue to go higher so what we have to do is make sure when we see this a few times to be very, very careful with entries on these exchanges and the thing is what It's interest.
The sting is that it won't happen forever, they'll do it multiple times and then give up on a chart that's trending, they won't after a period of time, but it's interesting when that happens and you see it repeatedly. on a chart now what that can tell you is we're training here on a chart remember Sq hasn't been trading that long this is a new problem and even though we're on a trend because it's a new problem we have a lot more volatility. Those are important things to acknowledge, so we went through this. A little extended flashback here.
The volatility stop turns red. bounces. about this resistance and the reason I'm saying that is because what happened now we broke the downtrend and we're trying to establish the uptrend ok that's the pattern I always look for on a chart the downtrend breaks the pattern it starts to move so maybe take it will take a shot here to a potential trade and we broaden out so winner chicken dinner winner acknowledgment of the downtrend break support support once again wins the day you have nice little retracement little 3/8 trap retracement you feel lucky here five days in a tight consolidation I think there's another shot it all stops close enough for you to set up another potential trade oh look at them do it again again, see how much you can learn from a chart if you just watch price action, see how you can learn that sending your stops too hard is probably bad for you tea causing a lot of pain.
Yes, I have the tendency. just moving through each of those potential setups can tell a lot about price action. Bianca is correct. Any slower term graph will have better results. Well, slower term charts will always have better results. Full data slows down the chart. The position traitor, as I said, the dirty secret in the industry, guys, it's the people who actually make money in the market or position traders, that's fine and by the way, you don't have to. trade a full weekly chart, heck you can do a three day chart, can you make money on all three days?
Yes, even a 2-day chart removes a lot of that noise. two six walking to her during that period oh it's three days we're going to go daily there's the daily u6 hello kanashii ok so you walk in and even at the end the hello can guys it's all about the action of the price, configurations are the same. You know, notice here in the last alert that I set up here, the settings here are exactly the same. I'll tell her about bindings on a hike and she's there much tighter and much better to find that. that downtrend break here look how neat that was averaging a price action but you have to get used to that and it's very hard for people who have always traded regular candlesticks to just jump in and train walk and it's a shame because they're so used to it i need that exact price you have to give up that idea with the walk and a shoe when you're just following the charts ok but that's not really what this class was about the class was about the price action and the reason why I wanted to show you why I think that was a good exercise is simply because there's no perfect chart, there's no perfect pattern and as you follow a chart you've learned some great things about price action. price action ok let's say you were looking at a chart that started a trend already started a trend and you are trying to determine this but if this price action suits you for the next train that could be setting up a good exercise to make a trade has been a trend you see a trade setting up now let's go back in time and forward. we're getting little market maker games we're getting those little sweeps coming here follow price action tells you how much stop-loss you need to place how consistent the price action is and can give you great information on what the trade is coming What you're waiting for makes sense guys I hope you got something out of this today you're soldiers you've been here an hour and a half thanks for being here I really appreciate it I'll fix it up and we will post it as soon as I can thanks to you guys I really appreciate it practice on this price action focus on the big picture make sure you are trying these patterns you know if you want to build confidence in your training try the patterns in the past make sure they are working for you that you are seeing them correctly that you are following the patterns correctly agree and it will pay off in the future and now is a good time to be doing this and by the way just because the markets they're lousy right now doesn't mean we can't get into stocks like this is an inverse chart and it's very volatile and it's twice the market but if we get into shorter term charts we can practice our price action work here absolutely we can know we can find there is a big gap move going back three stays above you have to make that decision do i get into this in order to be quite far here by the way? that this is the trend indicator, it doesn't actually stop, do I enter this or how about this one up here?
Would this have been a better trade for you and start detailing the price action so you can start and get better and better at that price? action skills and trust me on this guys if you can do this if you can read price action any chart in any market anywhere I'm sure Steve would agree if you can read price action you can trade futures you can trade forex trading commodities you can trade you know anything put price action on a chart if you can learn to read price action right so everyone have a great afternoon have a great day remember Sunday Steve is teaching the class on Sunday night at p.m.
This will be in the training education room and also take note that I will be doing the e-learning session on Tuesday and for those of you who signed up for the 3:8 cheat class next Saturday you know to be ready for that. I'll be sending you some emails and all here soon about that 3/8 trap class coming up on Saturday. Okay, take care. Have a great weekend, have a good time. We'll talk to you soon, thanks guys.
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